Texas Cities See Population Boom, Even in Middle of Oil Bust

Developments such as Hines' Victory Park project in Dallas have thrived to meet the growing demand for office space by new and expanding companies.

Texas added more people between July 2014 and July 2015 than any other state, according to new U.S. Census population data released this week.

Nearly two-thirds of the almost 500,000 new Texas residents migrated from other states as Dallas, Houston, Austin and other metro areas lured companies ranging from Toyota and State Farm to Kubota and JP Morgan Chase. Most have taken advantage of generous relocation incentive packages offered by Texas while fleeing high housing, taxes and business cost areas.

Texas’s success in luring people and companies has created a more diversified economy that has helped shield the Lone Star State from the worst effects of the oil crash, though office and multifamily markets in Houston have suffered blows from layoffs.

Despite those recent pains, Houston and Dallas-Fort Worth placed first and second in population gains among the largest U.S. metropolitan areas from mid-2014 to mid-2015. Austin and San Antonio were not far behind, ranking among the top 20 in population gain. Eight of the 20 U.S. counties that gained the most population during the period are in Texas.

Atlanta and Phoenix, both housing bust markets after the recession, also ranked among the top five U.S. population gainers, while three California metro areas and three Florida metros landed in the top 20. Portland, OR and Nashville, TN, rounded out the list, gaining 40,621 and 36,435 people, respectively.

Texas, Florida, Arizona and the Carolinas dominated U.S. metro areas in terms of the largest percentage population gains. Among the 20 largest net population gainers, Austin and Orlando added 3% and 2.6%, respectively. Houston, Dallas, San Antonio, Phoenix, Denver, Tampa/St. Petersburg and Las Vegas all grew their population bases by 2% or greater from mid-2014 to mid-2015.

Only Houston, Austin and Orlando were among both the 20 with the largest absolute population gains and the 20 fastest-growing metros by percentage.

While the population increases are a sign of rising local and regional economic activity, the gains are relative, as the U.S. as a whole logged anemic population growth. With the retirement of the baby boom generation, the workforce-age U.S. population over the next 10 years will grow at one-fifth the average pace of the last three decades, according to CoStar Portfolio Strategy.

Slower population growth is among the factors that have limited U.S. GDP growth to the 2% range since the recession, although the U.S. is far better off demographically than either China or Western Europe, which are both expected to see working-age populations shrink by millions of people over the next decade.